A brief overview is given of the properties of spectral functions in finite nuclei as obtained from (e,ep) experiments. Based on recent experimental data from this reaction it is argued that the empirical value of the saturation density of nuclear matter is dominated by short-range correlations. This observation and the observed fragmentation and depletion of the single-particle strength in nuclei provide the motivation for attempting a self-consistent description of the nucleon spectral functions with full inclusion of short-range and tensor correlations in nuclear matter. Results for these ``second generation spectral functions will be discussed with emphasis on the consequences for the saturation properties of nuclear matter. Arguments are presented to clarify the obscuring role of pionic long-range correlations in this long-standing problem.
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